Islamic Bank has ambitious growth plans

Economy February 10, 2012 00:00


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The Islamic Bank of Thailand plans to issue bonds worth Bt5 billion in the second quarter, launch a property fund for Bt1.5 billion in the third quarter and expand its retail borrower base, Dheerasak Suwannayos, president of the bank, said yesterday.

 “The market is on our side, as interest rates have been decreasing, so we can launch Islamic bonds or sukuk in the second quarter of this year,” Dheerasak said.

Ibank wants to raise long-term funds and lend to its customers, he said. The Bt5-billion bond issue and the bank’s deposits of Bt15 billion will be used for lending this year.

The bank plans to advance new loans worth Bt20 billion this year, he said.

It will also launch a Bt1.5-billion property fund in the third quarter, as it plans to buy office buildings for its headquarters.

The bank will not need to raise capital this year but plans to ask for new capital of Bt4.83 billion from the Finance Ministry, he said. It has already submitted its plan to the ministry.

New lending last year rose 34 per cent, or Bt28.87 billion, leading to outstanding loans in 2011 of Bt114.97 billion, he said.

Deposits also rose by 36 per cent, or Bt35.29 billion. At the end of last year, deposits were Bt117.58 billion. Its total assets were worth Bt133.36 billion.

After making provision for loan reserves, it made a profit of Bt1.13 billion. However, non-performing loans rose to Bt7.72 billion, or 6.71 per cent of total loans. Before the massive flooding last year, bad loans were 4.9 per cent, he said. “We target bringing down NPLs to 2.5 per cent in five years.”

Retail individuals and small and medium-sized enterprises currently account for 66 per cent of Ibank lending while large corporate clients account for 34 per cent. Dheerasak said that he wanted to reduce corporate clients to 22 per cent of the portfolio this year.

In the next five years, retail borrowers should represent 45 per cent of the portfolio, SMEs 40 per cent and large corporates 15 per cent, he said. Large corporate clients began contributing to its profits in 2010.